Question
Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale...
Stoll Co.'s long-term available-for-sale portfolio at the
start of this year consists of the following.
| Available-for-Sale Securities | Cost | Fair Value | ||||
| Company A bonds | $ | 531,500 | $ | 495,000 | ||
| Company B notes | 159,040 | 145,000 | ||||
| Company C bonds | 663,000 | 641,100 | ||||
Stoll enters into the following transactions involving its
available-for-sale debt securities this year.
| Jan. | 29 | Sold one-half of the Company B notes for $78,200. | ||
| July | 6 | Purchased bonds of Company X for $120,700. | ||
| Nov. | 13 | Purchased notes of Company Z for $268,000. | ||
| Dec. | 9 | Sold all of the bonds of Company A for $515,200. |
The fair values at December 31 are B, $83,500; C, $605,700; X,
$108,000; and Z, $280,000.
1. Prepare journal entries to record these
transactions, including the December 31 adjusting entry to record
the fair value adjustment for the long-term investments in
available-for-sale securities.
2. Determine the amount Stoll reports on its
December 31 balance sheet for its long-term investments in
available-for-sale securities.
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